EXPLANATION OF CATEGORIES BALANCE SHEET I. ASSETS: Everything owned by or owed to your business that has cash value. A. Current Assets – Assets that cam be converted into cash within one year of the date pm the Balance Sheet. 1. Cash – Money you have on hand. Include monies not yet deposited 2. Petty Cash – Money deposited to Petty Cash and not yet expended 3. Accounts Receivable – Money owed to you for sale of goods and/or services 4. Inventory – Raw materials, work in process and goods manufactured or purchased for resale. 5. Short-Term Investments – (Expected to be converted to cash within one year) Stocks, bonds, C.D.’s, List at lesser cost or market value. 6. Prepaid Expenses – Goods or services purchased or rented prior to use. (Ex. Rent, insurance, prepaid inventory purchases, etc.) B. Long Term Investments – Stocks, Bonds, and special savings accounts to be kept for at least one year. C. Fixed Assets – Resources a business owns and does not intend for resale. 1. Land – List at original purchase price 2. Buildings – List at cost less any depreciation previously taken 3. Equipment, Furniture, Autos/Vehicles – List at cost less depreciation. Kelley Blue Book can be used to determine value of vehicles. II. LIABILITIES: What your business owes; claims by creditors on your assets. A. Current Liabilities – Those obligations payable within one operating cycle 1. Accounts Payable – Obligations payable within one operating cycle. 2. Notes Payable – Short-term notes; list the balance of principal due. Separately list the current portion of long-term debts. 3. Interest Payable – Interest accrued on loans and credit 4. Taxes Payable – Amounts estimated to have been incurred during the accounting period 5. Payroll Accrual – Current liabilities on salaries and wages B. Long-Term Liabilities – Outstanding balance less the current portion due (Ex. Mortgage, vehicle). III. NET WORTH: Also called “Owner’s Equity”; the claims of the owner or owners on the assets of the business (document according to the legal structure of your business). A. Proprietorship or Partnership – Each owner’s original investment plus earnings after withdrawals. B. Corporation – The sum of contributions by owners or stockholders plus earnings retained after paying dividends. The NH SBDC is an outreach program of the UNH Whittemore School of Business and Economics, and a cooperative venture of the U.S. Small Business Administration, the State of NH (DRED), the University System of NH, and the private sector.